Impact of White House Digital Assets Report on Cross-Border Decentralized Ledger Technology (DLT) Payment Initiatives
The White House has recently released a comprehensive 166-page Digital Asset report, providing details about wholesale and retail CBDCs. The report emphasizes a broader digital financial innovation and regulatory modernization agenda, but it maintains caution regarding the issuance of a U.S. Central Bank Digital Currency (CBDC), particularly around wholesale versus retail CBDCs in international payment modernization contexts.
The report supports advancing digital asset markets with clear regulatory frameworks and modernization of bank regulations, aiming to strengthen the U.S. dollar and digital payments infrastructure. However, it refrains from endorsing the creation or promotion of a U.S. CBDC for either wholesale purposes (interbank or financial institution settlement) or retail use (consumer-level payments).
This cautious stance implicitly affects international payment modernization efforts, as the report's position against a U.S. CBDC deployment signals a preference for regulatory clarity, innovation in private digital assets, and payment modernization within existing financial infrastructure.
The distinction between retail and wholesale CBDCs is significant for cross-border payment projects. The report's details about wholesale CBDCs could influence the US's stance on international payment modernization efforts, potentially impacting the country's participation in major international payment modernization efforts.
It's important to note that the initial ban on CBDCs, instated by a January executive order by Trump, seemed to cover all types, but the House recently passed the Anti-CBDC Surveillance Act, which targets only retail CBDCs. This leaves the status of wholesale CBDCs uncertain.
The report does not explicitly state whether a wholesale CBDC is allowed or banned. However, it advocates for private sector innovation over government-issued digital currency. Ledger Insights has analysed the report in two deep-dive analyses, with the first focusing on the Banking section.
The report contains important policy recommendations for digital assets, with a President's Working Group, excluding the Federal Reserve and banking regulators, tasked with drafting this comprehensive framework. The report's details about wholesale CBDCs could have significant implications for the US's role in international payment modernization.
In summary, the White House does not currently support wholesale or retail CBDCs as part of international payment modernization but prefers a regulatory and innovation framework that empowers digital asset markets and improves payment systems without issuing CBDCs. This reflects a strategic choice to monitor developments, address illicit finance, and maintain dollar strength while avoiding potential risks associated with CBDC issuance.
- The White House's Digital Asset report supports advancing stablecoins and other digital assets with clear regulatory frameworks.
- The banking industry is urged to modernize its regulations with an aim to strengthen the U.S. dollar and digital payments infrastructure.
- The report maintains a cautious stance on CBDCs, preferring to focus on innovation in private digital assets instead.
- The distinction between retail and wholesale CBDCs is significant, particularly in the context of cross-border payment projects.
- The report's details about wholesale CBDCs could influence the US's stance on international payment modernization efforts, which might impact its participation in such projects.
- The Anti-CBDC Surveillance Act, recently passed by the House, targets only retail CBDCs, leaving the status of wholesale CBDCs uncertain.
- The report does not explicitly endorse or ban wholesale CBDCs, but advocates for private sector innovation over government-issued digital currency.
- Finance news outlets, including Ledger Insights, have provided insights and analysis on the implications of the report for the US's role in international payment modernization, political debates about CBDCs, and the wider digital asset industry.
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